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In Stubbs the Zombie the player plays as a zombie, and the primary goal is to kill humans and devour their brains. Eating brains gives back a certain amount of lost health to the player as well as converting those humans into zombies, causing them to fight alongside the player. The player has the option of beating an enemy to death with melee strikes to transform them into zombies. Stubbs' zombie state prevents him from wielding any conventional weapons, and instead wields a variety of improvised weaponry and combat techniques, most of which are done using a specific body part as explosives or makeshift devices. Stubbs can drive a wide variety of vehicles, such as cars, tractors and tanks. All of the aforementioned improvised weapons, excluding Stubbs' hand, have a chance of converting the humans they kill into zombies. Stubbs can herd zombies which are in range by whistling. Since there is a limit to how many zombies will follow him at a time, Stubbs can guide the rest by sending whole groups of zombies in a direction with a single shove. Stubbs' zombie followers can kill humans and eat their brains, just like Stubbs can, and any human killed by one of his minions will also turn into a zombie. An enemy that fires upon a zombie in a group will attract the attention of all the rest of the zombies. Crowds of zombies serve as a great shield when approaching enemies armed with ranged weapons and are needed for sowing the necessary chaos and confusion into a difficult melee.

In 1933, Edward "Stubbs" Stubblefield is a poor traveling salesman during the Great Depression, who tries to make a living. He temporarily finds happiness with a girl named Maggie Monday, but he meets his unfortunate end when Otis, Maggie's father, comes home, and kills him, dumping his body in the wilderness.

Years later, in the city of Punchbowl, Pennsylvania, at its opening ceremony in 1959, the city, founded by multi-billionaire playboy industrialist Andrew Monday, Maggie's son, has been built directly on top of Stubbs' not-so-final resting place. Stubbs rises from his grave as a zombie and decides to get his revenge by eating the brains of the inhabitants of Punchbowl, quickly creating his own army of the undead, causing increasing amounts of havoc as the zombies clash with the various militant factions of the area. During the chaos, Stubbs kills Otis Monday by blowing up his house after a brief reunion. Shortly before this, in a barn (spoofing the war film Patton), Stubbs stands in front of an American flag hanging from a barn wall and gives a speech to his zombies. Though the speech consists only of the word "Brains" said in many tones with limited gestures, his zombies apparently understand him well enough to let loose a cheer of "BRAINS!" before shuffling away.

Stubbs eventually reunites with Maggie and the two lovingly embrace—with Stubbs promptly eating her brain. Before her brain was eaten, Maggie revealed Stubbs was in fact Andrew's father. The angered Andrew tries to get his revenge on Stubbs by killing him from behind the force field, halfway destroying Punchbowl. Stubbs, however, must destroy the force field and loom toward Andrew, but Maggie, now a zombie, convinces him to spare their son. The game ends with Stubbs and Maggie sailing off on a small rowboat, kissing as Andrew and all of Punchbowl are destroyed by a nuclear bomb to cleanse the undead infestation, and they both "live" happily ever after.

Punchbowl is a retro-futuristic city that resembles the future as portrayed by the media in 1950s. It includes hovercars, laser weaponry, a monorail, and robots. Punchbowl was envisioned and funded by Andrew Monday and created by his teams of scientists, led by former Nazi scientist Dr. Hermann Wye.

Stubbs the Zombie was Wideload Games' first game after its founding. The company's founder, Alex Seropian had previously co-founded and worked with Bungie and used the production as an experiment to determine how he would run an independent studio.[5] The game's development began with a team of twelve, but Seropian decided to use contractors which raised the number to sixty. This decision brought difficulties when the hiring process wasn't properly overseen, leaving the team with a shortage of producers and lack of cohesion.[5] A game development model was developed, with 12 full-time employees overseeing pre and post production phases, while independent contractors worked with the remaining content.[5] Using the Halo engine provided some problem in the early stages. The engine was completely developed by Bungie and it lacked notes from them or peer reviews that would emphasize possible programming problems.[6][5] Due to this, an excessive amount of time was spent determining which contractors would require training to use the engine, as well as how long they would receive instruction.[5]

From the onset, the game's concept intended to innovate the horror genre by letting the player play as a zombie. Seropian claims that the team intended to take "something that people are familiar" and turn "it upside down."[7] The game was intended to contrast with what was regarded as the general idea of zombie games, changing the "straightforward good guys versus zombies" format found in games like Resident Evil.[7] Humor became a key aspect during the developmental stage, with Seropian claiming that the team wanted to go "beyond just amusing dialogue in a cut-scene".[7] Character dialogue and game mechanics were designed so that "funny results" are directly based on the player's action, preventing them from becoming repetitive or stale.[7]

The Xbox version received "generally favorable reviews", while the PC version received "average" reviews, according to video game review aggregatorMetacritic.[27][26]Eurogamer claimed that the Xbox version had "lots of reasonable ideas that don't quite work" and "a general lack of cohesion".[10]

The game was perceived as "painfully short" and "linear", but "never boring".[15][19] The game's environments were described as "nicely varied", noting that "places like Punchbowl, the city of the future, are extremely well designed and appropriately cool looking."[15] The game's soundtrack received predominantly positive reviews. The character's voice acting was described as the element that "set the game apart", to the point of claiming that "Never before have the sounds of zombie moaning been done so well in a game." IGN emphasized the "futile cries from civilians and armed foes" and "squishy, scalp-munching sound effects" as elements contributing to a higher quality than the game's visuals.[19]

Detroit Free Press gave the Xbox version a score of all four stars, saying, "The chaos that ensues is as lighthearted as a blood-soaked zombiefest can be."[22]CiN Weekly gave the same version a score of 78% and said, "Sure, it's not the most action-packed or finely tuned game, but there are enough clever attacks and humorous elements in Pulse to keep you playing through to see what other goodies - or appendages - they'll toss your way."[27] However, The Sydney Morning Herald gave the game three-and-a-half stars out of five and called it "a brief ride and the action can become repetitive, but the sharp humour keeps you smiling."[23]

Stubbs the character was ranked second on EGM's Top Ten Badass Undead.[28]

Stubbs the Zombie, along with F.E.A.R., encountered controversy in November 2005 regarding cannibalism in games.[30]NIMF's David Walsh and U.S. Senator Joe Lieberman also criticized the game as "cannibalistic" and harmful to underage children. Senator Lieberman stated "It's just the worst kind of message to kids, and furthermore it can harm the entirety of America's youth". Wideload Games responded by saying that Stubbs is a zombie, not a human cannibal.[31]GamePolitics also chided the report, calling it "ridiculous" and citing 36 mainstream news outlets had picked the story immediately after the NIMF report.[32]